Ed. note: As we were putting this article together, Trump announced a 90-day pause on tariffs for some countries but China<\/a>. This news is moving fast.<\/em><\/p>\n President Trump\u2019s tariffs took effect today and we figured this would be a good time to do a little roundup. It\u2019s been difficult to sort out actual news \u2014 particularly news relevant to accounting and finance professionals \u2014 from the excess of noise. Thus we wanted to put a few things together that aren\u2019t 4chan memes.<\/p>\n If you see this screenshot floating around\u2026<\/p>\n \u2026know that the text originated on 4chan.<\/p>\n Before we proceed with the news part, you may be interested in reviewing this fact sheet the White House released on April 2: President Donald J. Trump Declares National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security<\/a>. TLDR: \u201cForeign trade and economic practices have created a national emergency\u201d (direct quote), \u201cresponsive tariffs\u201d are intended \u201cto strengthen the international economic position of the United States and protect American workers.\u201d<\/p>\n Now some news and information from around the tubes. Here\u2019s a story published in the ever-trustworthy Financial Times<\/em> on April 7: Companies get creative in finding ways to limit impact of Trump\u2019s tariffs<\/a>. For this piece, FT spoke to a couple people who know what they\u2019re talking about regarding potential strategies to mitigate tariff effects.<\/p>\n \u201cCan you lower the base through various customs planning techniques, so a good that is otherwise sourced at $100 and paying a 25 per cent tariff, can you make that good $90 paying a 25 per cent tariff?\u201d said Mark Ludwig, head of national trade advisory services at RSM, the largest US accounting firm outside the Big Four.<\/p>\n \u201cMagnify that across your universe of goods and over time those moves can add up and make you more competitive.\u201d<\/p>\n Two valuation strategies in particular have increased in popularity, consultants said, as Trump has targeted industries that typically had low or no tariffs. The first involves arranging contracts with suppliers so that an importer can legally report an earlier sale price, before mark-ups by intermediaries. The second involves splitting payments to suppliers into two amounts, only one of which would attract duties.<\/p>\n An example could be a spirits importer whose supplier not only sold them the drink, but also provided advertising and promotional help, said Mathew Mermigousis, BDO\u2019s customs practice leader.<\/p>\n<\/blockquote>\n In February, Thomson Reuters<\/em> put out a short guide for tax and accounting professionals that sums up key tariff impacts: Decoding President Trump\u2019s tariffs: What tax and accounting professionals need to know<\/a><\/p>\n Journal of Accountancy<\/em> covered the topic in Confronting tariffs: Trade war tips for CPAs<\/a>, published in 2020. An editor\u2019s note in red text at the top warns that the article is from their archives and \u201cis provided for historical reference.\u201d<\/p>\n \u201cThe content may be out of date and links may no longer function,\u201d it says.<\/p>\n Here\u2019s a more recent one from JofA: Untangling tariffs: Consumers expected to bear the brunt<\/a><\/p>\n @HudsonLabs<\/a> has a specific example of a company\u2019s tariff strategy:<\/p>\n With a 46% reciprocal tariff on Vietnam, your jeans might be getting a bit more expensive. $LEVI<\/a> plans to mitigate tariff impacts through cost structure changes, vendor\/customer negotiations, and surgical pricing. pic.twitter.com\/yqM1Gvy45S<\/a><\/p>\n \u2014 Hudson Labs (@HudsonLabs) April 8, 2025<\/a><\/p><\/blockquote>\n AP is maintaining a timeline of Trump\u2019s tariff actions, posted here<\/a> by PBS. At publication time, it\u2019s updated up to April 4:<\/p>\n China announces plans to impose a 34 percent tariff on imports of all U.S. products beginning April 10, matching Trump\u2019s new \u201creciprocal\u201d tariff on Chinese goods, as part of a flurry of retaliatory measures.<\/p>\n The Commerce Ministry in Beijing says it will also impose more export controls on rare earths, which are materials used in high-tech products like computer chips and electric vehicle batteries. And the government adds 27 firms to lists of companies subject to trade sanctions or export controls.<\/p>\n<\/blockquote>\n CNBC suggests<\/a> that tariffs will lead to abandoned shipments at ports with the headline \u201cTrump tariffs will lead to abandoned freight at ports as cash-strapped businesses reject orders\u201d and spoke to the owner of a shoe company who imports 98% of his goods from China:<\/p>\n His once $50 pair of men\u2019s shoes and $35 little boys\u2019 shoes have already gone up $80 to $65, respectively, after recent trade war moves by the U.S., with Deer Stags set to pay more than a 104% new tariff on Chinese goods being stacked atop previous tariffs.<\/p>\n Prior to the tariff increases in 2025, his company was paying a 6% duty on their shoes.<\/p>\n \u201cThen the tariffs were raised by 10% two times, bringing my tariffs up to 26%. Then last week Trump put on an additional 34% and now the 50% levied today. All of these tariffs bring my tariff total to 110% on my non-leather shoes. My leather shoes now have a tariff of 120%. How do you budget that?\u201d Muskat said.<\/p>\n He estimates that the cost of freight orders subject to the new tariffs will rise from $60,000 to between $600,000 and $1 million.<\/p>\n \u201cThe cash flow burden is the immediate problem,\u201d he said. \u201cWe don\u2019t have the capital to grapple with this. There is only one pile of money and I will pay for this, but that means I\u2019m not paying for something else. We are going to pay the duty because we have no choice.\u201d<\/p>\n<\/blockquote>\n Always eager to demonstrate their world class expertise in esoteric accounting topics, firms have published their own guides to tariffs.<\/p>\n PwC put out a PDF<\/a> in March: Accounting implications of tariffs<\/em>. <\/p>\n RSM gets way deep into the weeds: Tariffs and tax accounting: How to manage costs<\/a><\/p>\n Issue:\u00a0<\/strong>Potential large book-to-tax adjustments for uncapitalized tariff costs or uncapitalized variances<\/p>\n Action:\u00a0<\/strong>A review of current book and tax cost allocations can identify opportunities to reduce book-tax differences by capturing any increases in costs through book capitalization, thereby creating alignment with or decreasing the required tax capitalization.<\/p>\n Companies using standard and burden rate costing should be reviewing their cost allocations at least regularly. However, if you haven\u2019t been doing so, or if you anticipate significant effects from tariffs, these rates should be revisited and updated appropriately to avoid downstream tax issues. Two potential impacts of tariffs on tax cost allocation are:<\/p>\n Generally, any tariffs paid on inventory acquired for resale goods or direct materials are required to be capitalized under the tax inventory and uniform cost allocation (UNICAP) rules. Similarly, any variances or over\/under burdens for inventory are likewise required to be capitalized.<\/p>\n<\/blockquote>\n A few more tariff articles written and published by accounting firms:<\/p>\n Lastly, this is what President Trump had to say this morning:<\/p>\n We hope this has been helpful. Comments are open if you\u2019d like to discuss tariffs, please refrain from fighting amongst yourselves and stay on topic.<\/p>\n![\"one](\"https:\/\/i0.wp.com\/www.goingconcern.com\/wp-content\/uploads\/2025\/04\/RDT_20250408_223108552070126128139126.jpg?resize=624%2C1024&ssl=1\")
<\/figure>\n<\/div>\n![\"a](\"https:\/\/i0.wp.com\/www.goingconcern.com\/wp-content\/uploads\/2025\/04\/RDT_20250409_1319102712221028336952303.webp?resize=553%2C606&ssl=1\")
<\/figure>\n<\/div>\n\n
\n\n
\n
\n\n
\n\n
April 4<\/h2>\n
\n\n
\n\n
Planning consideration: Review how cost accounting procedures affect tax<\/h2>\n
\n
\n
\n![\"\"](\"https:\/\/i0.wp.com\/www.goingconcern.com\/wp-content\/uploads\/2025\/04\/trump-be-cool.jpeg?resize=640%2C346&ssl=1\")
<\/figure>\n<\/div>\n
\nRelated<\/em><\/h3>\n<\/p><\/div>\n